Package holidays are hugely popular with Britons who often choose them to take an affordable break way from the UK. But the coronavirus pandemic meant that thousands of Britons faced cancelled package holidays which led Britons to ask for refunds from airlines and holiday companies. Many people were left frustrated, angry and financially struggling.
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But now, the Department for Transport has announced that it will extend ATOL protection for refund credit notes in a move that will see many holidaymakers’ financial security boosted.
Many consumers have been concerned as to whether their money would be secure if they chose to accept a refund credit note if their ATOL-protected booking was cancelled.
By law, any holidaymaker with a package holiday is entitled to receive a cash refund for any cancellation by the tour operator.
However, due to the challenges of coronavirus and operations amongst a plethora travel companies, refunds have been delayed for some.
By way of an alternative, some travel companies offered their consumers refund credit notes in lieu of cash refunds.
To make sure that bookings with ATOL protection keep their financial protection, refund credit notes issued for these bookings will benefit from ATOL protection up until September 30, 2021 if they have been issued between March 10, 2020 and September 30, 2020 for an ATOL protected booking that has been cancelled due to COVID-19.
But beware, if you have been offered a refund credit note, you must have also been offered a cash refund at the same time.
If the consumer chooses a refund credit note, they should have the option to convert it to a cash refund at any point.
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If a holidaymaker wants to convert a refund credit note to a cash refund, they must do it before September 30, 2021.
Paul Smith, Consumer Director at the UK Civil Aviation Authority has said that the move will provide consumers with much-needed confidence.
He said: “This news provides much-needed clarity for consumers, who should now feel confident that their money is secure if they have chosen to accept a refund credit note for their cancelled ATOL-protected booking.
“While consumers may accept a refund credit note if offered, they are entitled to a cash refund and must be offered this option at the same time as a refund credit note or booking amendment.
“We have contacted ATOL holders to advise them of their responsibilities.”
An ABTA spokesperson also welcomed the move.
They said: “ABTA welcomes the Government’s action to back Refund Credit Notes through the ATOL scheme; this gives reassurance to consumers and supports the travel industry at an especially difficult time.
“This development verifies that the ATOL scheme provides protection for cancelled holidays when a refund remains outstanding in the event of a travel organiser’s failure.
“This is the same for non-flight based package travel with ABTA bonding under the Package Travel Regulations.
“This assurance enables consumers to hold and rely on Refund Credit Notes with confidence, before rebooking a much needed holiday.
“The move will particularly help tour operators that have not been able to immediately refund customers for cancelled package holidays because they have had to wait for money back from airlines and other suppliers.
“We now need the Government to listen to industry calls for tailored support to protect businesses and jobs until its recovery can properly take effect.”
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